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Ever since the cryptocurrency craze started to spread throughout the world, Bitcoin trading has been one of the most talked about subjects in international trading circles. The phenomenon, which has swept across Europe, Asia and North America, appears to have infiltrated Africa, South Africa. Since early 2018, South Africa, Africa’s second largest economy has experienced a massive surge in Bitcoin usage, a trend which continues to this day despite the instability of the crypto-market.

The Major Reasons Why Bitcoin is so popular in SA

There are many factors that can be attributed to the sudden growth of cryptocurrency traders and users in the country. A lot of them have to do with the poor performance of the national currency, the RAND. At the time of writing, the RAND, which stands at 0.073 United States Dollars has struggled for the most part of 2018, especially in June 2018 when the currency hit a six-month low. This triggered massive selloffs in emerging markets, as traders started to lose confidence, with the RAND steadily depreciating in value.

The situation is not helped by the overall condition of the South African economy as well as the political instability the country is in ahead of elections. All these factors combined have forced many South Africans to divert their investments towards cryptocurrency, Bitcoin.

The Current Scenario in South Africa:Cryptocurrencies have been embraced by South African citizens in large numbers, as more and more online trading platforms and cryptocurrency exchanges started infiltrating the market. The country is home to one of the first cryptocurrency ATMs in the world, with several companies such as Luno and Paxful allowing users to buy and sell Bitcoin. Additionally, South Africa has been ranked as the country with the highest number of searches for Bitcoin in the past on multiple occasions.

However, Bitcoin isn’t the only currency gaining traction in the country, with many traders attempting to diversify their crypto-trading portfolio, investing significantly in tokens such as Litecoin, Bitcoin Cash, Ripple etc. There are many reputed trading platforms which offer both forex and cryptocurrency trading options to South African citizens.

Crypto Currency trading options in South Africa

Due to the complications and uncertainty when it comes to the South African Economy, traders have flocked towards cryptocurrencies for the hope of achieving better returns. Since cryptocurrencies are de-centralized in nature, many people have faith in their value over national currencies which are controlled by a centralized authority.

Thus, as a South African trader, you must dedicate a significant portion of your time towards researching. Luckily, there are South African trading websites, which can give you a fair idea about the most reliable exchanges and platforms along with more information’s about crypto trading in South Africa. IQ Option and AVA Trade are examples of such platforms.

Buying Bitcoin and Other Cryptocurrencies in South Africa:

There are two main sources from where South African citizens can acquire Bitcoin and other cryptocurrencies in a legally compliant manner. They are explained below.

Using P2P Markets: A relatively newer addition to the cryptocurrency market, peer-to-peer marketplaces refer to virtual market places where users can interact and acquire cryptocurrencies. For instance, in the platform, buyers who are seeking to acquire Bitcoin with a credit or debit card are linked with people who want to purchase products from restricted websites with no Bitcoin support.

Using Crypto-Exchanges: There are many cryptocurrency exchanges and platforms such as IQ Option and Coinbase, which offer a simple way to buy and exchange Bitcoin using fiat currency.

Final Thoughts:

Thus, the cryptocurrency craze entering South Africa can be attributed to a mix of many different factors and important events. With a growing cryptosphere with an excess of 2000 tokens to choose from, the future for crypto-trading in South Africa looks bright indeed.

Bitcoin is the fastest way to transfer money internationally, whereas Wire Transfers takes several days. When you pay a cheque from another bank into your bank, the bank will often hold that money for several days. Bitcoin transactions are generally far faster.

With Bitcoin you can send money anywhere, and it will arrive 10 minutes later, after the bitcoin network processes the payment. It takes 10 minutes for the transaction to be checked by the network and proceeded.

Simpler

Bitcoin transactions do not require you to give up any private information. Instead, they use two keys: a public key, and a private one. To send bitcoins, you need two things: a bitcoin address, and a private key.

Cheaper

Transactions with Bitcoin are almost free if the sum transacted is greater than 0.01 BTC. A token sum is imposed to provide some incentive to the miners to include the transaction in the blockchain.

“To send bitcoins, you need two things: a bitcoin address, and a private key”

Bitcoin address

A Bitcoin address is a unique identifier which allows you to receive Bitcoins. Be sure to have copied the destination address exactly before sending Bitcoins to it, as Bitcoin are not reversible.

Every Bitcoin address has a matching private key, which is saved in the wallet file of the person who owns the balance.

Private key

A private key is a secret code which allows the user to prove his ownership of his Bitcoins. Every Bitcoin address has a matching private key, which is saved in the wallet file of the person who owns the balance.

Price

The current market price for a Bitcoin is always changing due to the supply and demand for it. Bitcoins are traded on Bitcoin Exchanges such as MtGox.com. and Bitstamp.

Bitcoin Client

The Bitcoin-QT Client (Downloadable at bitcoin.org) is the original software written by Satoshi Nakamoto, the Bitcoin’s Creator.

Miners

Miners are individuals who run computer systems to repeatedly calculate hashes with the intention to create a successful block and earn coins from transaction fees and new coins created with the block itself. The term references an analogy of gold miners who dig gold out of the ground and thus ‘discover’ new gold that can be used to create new coins, with a similar kind of discovery occurring with a successful hash to create new Bitcoins.

2.2 Bitcoin Protocol

Bitcoin transactions are sent from and to electronic bitcoin wallets and are digitally signed for security. Everyone on the network can know about a transaction, as the history of a transaction can be traced back to the point where the bitcoins were mined (created).

Every transaction that took place is stored in a vast general ledger called the block chain. If you want to know the balance of any bitcoin address, you have to rebuild it using the block chain.

Because your transaction must be verified by miners, you are sometimes forced to wait until they have finished mining. The bitcoin protocol is set so that each block takes roughly 10 minutes to mine you can download the digital goods or take advantage of the service that you paid for.

The mining process currently creates 25 Bitcoins every 10 minutes and the total number of issued Bitcoins has been capped to 21 million Bitcoins. It should be reached in 2040. After this date, the total number of Bitcoins will remain unchanged. It is a trememdous difference with printed currencies such as dollars and euros, instead of Central Banks which constantly issue new money, creating a permanent inflationist monetary system.

2.3 Bitcoin Mining

In traditional fiat money systems, governments simply print more money when they need to. On the contrary, bitcoin is not printed at all but « mined ». Computers around the world “mine” for coins by competing with each other. Everybody can buy bitcoins on the open market, but can also mine. Mining bitcoin requires strong computing power.

The bitcoin network collects all of the transactions made during a set period into a list, called a block. The miners verify and confirm those transactions, and write them into a general ledger : the blockchain.

The Blockchain

The Blockchain is a long list of blocks. Miners all compete with each other to mine blocks. When a block of transactions is created, miners start their work. They apply a mathematical formula turning the block into a hash, which is a far shorter and seemingly random sequences of letters and numbers.

The hash rate is the number of calculations that your hardware can perform every second as it tries to crack the mathematical problem. Every time someone successfully creates a hash, they get a reward of 25 bitcoins, the block chain is updated. Hash rates are measured in megahashes, gigahashes, and terahashes per second (MH/sec, GH/sec, and TH/sec. The higher your hash rate, the more likely you are to solve a transaction block and the more you earn.

Download the software

Depending on which equipment you choose, you will need to run software to make use of it. Typically when using GPUs and FPGAs, you will need a host computer running two things: the standard bitcoin client, and the mining software.

Standard bitcoin client

This software connects your computer to the network and enables it to interact with the bitcoin clients, forwarding transactions and keeping track of the block chain. It will take some time for it to download the entire bitcoin block chain so that it can begin. The bitcoin client effectively relays information between your miner and the bitcoin network.

Bitcoin mining software

The bitcoin mining software is what instructs the hardware to do the hard work, passing through transaction blocks for it to solve. There are a variety of these available, depending on your operating system. They are available for Windows, Mac OS X, and others.

Bitcoin Mining Hardware

There are three main hardware categories for bitcoin miners: GPUs, FPGAs, and ASICs.

CPU/GPU Bitcoin Mining

The least powerful category of bitcoin mining hardware is your computer itself. Theoretically, you could use your computer’s CPU to mine for bitcoins, but in practice, this is so slow by today’s standards that there isn’t any point. You can enhance your bitcoin hash rate by adding graphics hardware to your desktop computer. Graphics cards feature graphical processing units (GPUs). You would rather mine Litecoin, which is designed to be more fair for CPU mining.

FPGA Bitcoin Mining

A Field Programmable Gate Array is an integrated circuit designed to be configured after being built. They offer performance improvements over CPUs and GPUs. Single-chip FPGAs have been seen operating at around 750 Megahashes/sec, although that’s at the high end. It is of course possible to put more than one chip in a box.

ASIC Bitcoin Miners

Application Specific Integrated Circuits (ASICs) are specifically designed to do mine bitcoins at mind-crushing speeds, with relatively low power consumption. with speeds anywhere from 5-500 Gigahashes/sec Vendors are already promising ASIC devices with far more power, stretching up into the 2 Terahashes/sec range.

Mining profitability

Regarding the Energy consumption, you have to divide the hash count by the number of watts to work out how many hashes you are getting for every watt of electricity that you use.

One of the other key parameters is network difficulty. This metric determines how hard it is to solve transaction blocks, and it varies according to the network hash rate.

Mining Pools

Most mining these days is the domain of large mining groups called « mining pools ». Mining pools are defined as groups of miners working together to solve a block and sharing the rewards of that block.

Bitcoin (symbol BTC or XBT) is a digital currency, created, held and exchanged electronically. Bitcoin is based on strong cryptographic principles, and designed to enable users to send money over the Internet without needing a credit card or a bank account. Bitcoin is run collectively by the users who uses the Bitcoin Client. Bitcoins are produced by lots of running computers all around the world (the Bitcoin Network), using software that solves mathematical problems. Bitcoin issuance has been pre-determined by a complex matematical formula, the Bitcoin Protocol. Bitcoin transactions are effected collectively by the Bitcoin Network. As such, Bitcoin is a decentralized currency, with no central authority, no government, company, or bank in charge of Bitcoin. Bitcoin is not based on gold; it is based on mathematics.

1.2 Bitcoin in-depth

A decentralized world currency :

Bitcoins are created, issued and controlled by the Bitcoin Network, a group of voluntary people who dedicated some computing capacity units to perform the equivalent mission of a Central Bank. Bitcoin’s most important characteristic is that it is decentralized. No single institution controls the bitcoin network. That means no central authority can devaluate it neither take it from holder (at least without legal approval), contrary to what the European Central Bank did in Cyprus and recommends to do in the future.

A non-inflationist money :

The mining process currently creates 25 Bitcoins every 10 minutes and the total number of issued Bitcoins has been capped to 21 million Bitcoins. It should be reached in 2040. After this date, the total number of Bitcoins will remain unchanged. It is a trememdous difference with printed currencies such as dollars and euros, instead of Central Banks which constantly issue new money, creating a permanent inflationist monetary system.

A peer-to-peer Network :

Bitcoin is a digital currency which uses peer-to-peer technology to facilitate instant payments. Bitcoin uses cryptography for security and some transactions. It is hard to counterfeit as each Bitcoin. Bitcoins are created through a “mining” process that uses computing power in a distributed network. This network also processed and controlled transactions made with bitcoins.

A transparent network : the Block Chain

Every Bitcoin transaction is recorded in a huge version of a general ledger, called the block chain. The block chain is a public ledger of all transactions in the Bitcoin network.

A user-friendly payment solution:

Bitcoin can be used to buy goods and services electronically, or can be changed for major printed currencies. In that regards, Bitcoin looks like conventional printed money such as dollars and euros, which can be also traded digitally.

Bitcoins are divisible to 8 decimal places; Bitcoin fractions are called satoshis in reference to the pseudonym of the Bitcoin’s creator : Satoshi Nakamoto. Users are called « Bitcoiners » and store their Bitcoins in a digital wallet, while transactions are verified by a digital signature known as a public-encryption key.

In conclusion, Bitcoin is more than just a Digital Money, it is also a revolutionnary Technology and a new network. Some Bitcoiners called Bitcoin the « Money of Internet », while others pretend it is « the Internet of Money ».